Metaverse Wars

Teaching Note for HBS Case No. 723-431. Metaverse Wars recaps the development of the metaverse concept and the attendant hype, bringing the narrative up to the summer of 2023 when Meta’s big pivot looked more like a costly misstep than a stroke of strategic genius. In 2021, the idea of “the metaverse” reached peak hype with Mark Zuckerberg’s announcement that Facebook was changing its name to Meta—and would spend up to $10 billion a year on metaverse development—reflecting the fact that it was becoming a metaverse-first company. By 2023, metaverse-related expenses were dragging down Meta’s earnings (prompting Zuckerberg to announce Meta’s “year of efficiency”), headset adoption was lagging expectations, user growth had stalled, and the promising shine of being “the next big thing” was starting to wear off the entire category. Meta’s high-end Quest Pro headset ($1,500) had flopped commercially, and Apple’s announcement of the Vision Pro headset ($3,500) had reset expectations for what the headset category—“visual computing” in Apple parlance—might ultimately become.

Stepping back from the latest turn of the hype cycle, the case revisits the core concepts that drove metaverse strategy across the major tech companies in the 2010s and asks whether some of the hopeful assumptions still apply, which players stand to gain if a more immersive and three-dimensional internet emerges along the lines now established by the metaverse hype, and where the concept of the metaverse goes from here. Factors influencing the emergence of a new computing paradigm are considered, the current stack of technologies is examined, and possible pathways for the future of the metaverse are explored.